Simmons Remains Sidelined on Weatherford (WFT) - PT to $7.20

Simmons reiterates Neutral rating on Weatherford International (NYSE: WFT), and raised the price target to $7.20 (from $7.18), following a 1Q review.

Analyst Bill Herbert commented, "The primacy of the WFT story remains balance sheet and FCF. While the stock endured a cathartic sell-off due to resurgent balance sheet/FCF concerns (and valuation and losing share to BHI as the go-to large cap oil service beta play), the fundamental story isn’t as threatening as recent stock price performance would suggest in our view. While we believe the company’s FCF forecasts are aggressive, WFT has sufficient liquidity in the near-term comprised of $840M in undrawn revolver capacity and $464M in cash balances. Positive near-term catalysts could be forthcoming in the form of a Zubair settlement as well as the prospect of a meaningful debt refinancing which would serve to effectively extend looming debt maturities over the next two years. Given the recent sell-off, valuation has improved as the stock currently trades for ~8x 2018E EBITDA. Assuming a targeted multiple of ~9x, the stock could conceivably trade to $7.20/share."

For an analyst ratings summary and ratings history on Weatherford International click here. For more ratings news on Weatherford International click here.

Shares of Weatherford International closed at $5.43 yesterday.

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